Richard C. Longworth, senior fellow at The Chicago Council on Global Affairs, contributes his knowledge and ideas about issues that affect the Midwest.

Thursday, April 24, 2014

For College Grads, It's a Cold World Out There

My wife arrived at our apartment building at the same time as a young man delivering groceries from a local supermarket. She held the door for him. He thanked her and smiled sourly, almost apologizing for his state in life. “Not much for a college degree, is it?” he said.

No indeed. But how typical was he? We hear so much about the parlous job situation for college grads these days. The papers are full of anecdotes of well-educated young Americans emerging with a degree, a lifetime of debt, and no job at all. Nor any place to live for their childhood bedrooms in their parents’ homes. Nor any real idea how to access the adulthood for which their four years on campus was supposed to prepare them.

But how bad is it really? Things clearly are tougher now than they were for their parents’ generation. But is this bad luck for a few, or an affliction that could burden an entire generation?

Some real study, leading to accurate figures, is needed. The good news is that this work is being done. The bad news is that, well, it’s bad news.

A new study from Minnesota showed that only 40 percent—barely two in five—of young Minnesotans with bachelor’s degrees had a full-time job two years after graduation. That means that, two years after they got that diploma, three-fifths of that state’s young grads are either unemployed or underemployed.

The picture is a little better for grads with masters’ or other advanced degrees. Fifty-six percent, somewhat more than half, had full-time jobs two years after graduation.

The study was done by Alessia Leibert, an analyst at the Minnesota Department of Employment and Economic Development, as part of a 29-state project on workforce data. Leibert’s study was featured in a story by Adam Belz in the Minneapolis Star Tribune.

These figures are grim enough. They are made more so by the fact that they come from Minnesota. That state suffered less than most in the recession and now has an unemployment rate of 4.8 percent. This is far below the national rate of 6.7 percent: in fact, many economists consider an unemployment rate of four to five percent to mean virtually full employment.

In other words, if you want a job, Minnesota is a great place to look.

And still—even Minnesota schools are graduating their students into what may be a futureless future.

The Minnesota study has its limits. Some grads undoubtedly went to other states to find jobs, although Minnesota is the only Midwestern state, other than Illinois, to avoid a net brain drain of college graduates. As Leibert notes, the study doesn’t count grads with jobs at federal agencies or those who are self-employed.

Still, the statistics are eye-opening.

No less than 63 percent of all grads, with bachelors or masters, actually had a job—full-time or part-time, permanent or temp—one year after graduation. But it’s easier to find a job than to keep it. Two years after graduation, only 40 percent of those with bachelors’ degrees had turned that entry-level job into full-time employment.

Those with full-time jobs seemed to be doing well. The median wage for those with a bachelor’s degree was $40,222. For those with a post-grad degree, it was $64,352.

Already, the college premium was showing up. Only 43 percent of community college grads had full-time jobs and were earning a median $36,887. Those with some post-secondary education but no two-year diploma were earning only $33,988 at the median—and only 33 percent of them had full-time jobs.

But there are huge differences between jobs. Forty-five percent of precision metal workers with two-year degrees had a full-time job a year after graduation and were earning a median of $39,246. Nurses with two-year degrees were making relatively good money, $35,410, but only 21 percent of them were working full-time. Cosmetology grads earned only $23,821 at the median and barely 14 percent of them were working full-time—not exactly a good return on their educational investment.

The same differences showed up among the graduates of four-year programs.

Accountants did the best. Nearly 70 percent of them had full-time jobs two years after graduation and earned a median $45,626. Close behind were business grads, with a 61 percent full-time employment rate and a median wage of $41,650.

Nursing paid the best, according to the report, with registered nurses and administrators making a median wage of $64,763. But less than 40 percent of them had a full-time job.

No one ever went into teaching to get rich but, even considering these low aspirations, graduates of teacher education programs are just scraping by. Only 16 percent of them had full-time jobs, and their median wage was only $29,233. Surprisingly, psychology and biology grads didn’t do much better.

The survey was limited to the most popular majors, and didn’t include many of the professional grads—doctors or lawyers, for instance. Other states are working on similar studies, but the Minnesota study is one of the first and most valuable.

Considering the bad news out of a good news state like Minnesota, the conclusion is the same that our neighborhood grocery deliveryman already reached: even with an education, it’s a tough world out there.

1 Comment

The answer is to promote STEM, and to give students a realistic picture of what skills are in demand.

I see lots of value in degrees like English, philosophy, business, political science, art history, etc. But it is not what the job market wants. So if students pursue these interests they should double major and get a degree in a science or engineering field as well where the demand is high.

But lets face it humanities degrees are usually pretty easy, science and engineering degrees are usually pretty hard. Students are told that a degree in anything is a magic ticket. So most will pick the easy business degree over the hard chemistry one.

The Global Midwest Initiative of The Chicago Council on Global Affairs is a regional effort to promote interstate dialogue and to serve as a resource for those interested in the Midwest's ability to navigate today's global landscape.